Indian defence officials are scrambling to finalise the details of a series of arms contracts worth tens of billions of pounds to be signed during presidential visits by Nicolas Sarkozy of France and Dmitry Medvedev of Russia this month.

The emerging south Asian power has embarked on a huge and ambitious modernisation of its military that will see up to £100bn spent on weapons systems, technology, planes, ships and submarines over the next five years, according to some estimates. Indian strategists, historically focused on their western frontier with Pakistan, now fear being outgunned by the Chinese military.

The size of the Indian market has sparked a scramble among western leaders to win lucrative deals for their ailing economies. India's state news agency reported that Russia had offered its latest low-noise Amur-1650 class submarines to India in an estimated £6bn deal.

The Indians are already building French-designed submarines and Paris is keen to persuade Delhi to expand the current programme rather than opt for a new contract with Moscow.

By far the biggest deal is a £22.5bn joint agreement between Delhi and Moscow to develop a "fifth-generation" advanced fighter jet. Likely to be signed during Medvedev's pre-Christmas visit, it will see Indian and Russian engineers collaborating on the design of the aircraft and production split between the two nations.

During Sarkozy's visit next week, the French hope to lobby Delhi to buy more than 120 Rafale fighter jets for about £8bn next year. A Russian company also hopes to win the contract.

The two aircraft projects together will cost India the equivalent of its entire education budget for the next seven years. At least a third of Indian adults are illiterate.

During the recent visit of President Barack Obama, deals for transport aircraft and other military equipment worth several billion pounds were concluded. American officials said they had created thousands of jobs.